INNOVATION CAN NOT BE INVENTED!

Innovation is quoted as first strategic priority by general managers(source PIMS/IMD 99)

It is a question of survivalAll markets are concerned!(fatality doesn't ’exist !!) E.g.: the milk or water markets…

INNOVATION

All brands, as strong as they are, need to evaluate

even DAVID BOWIE AND MADONNA...

• Market pressure (with the paradoxical equation: innovation/profit)

1. Competitive pressure• Social evolutions (consumers are more and more

demanding and become « consumption » experts)• Technological advances

KEY REASONS

What was true yesterday is not always true today, even less tomorrow...

Innovating is more and more difficult(70% of failures, copies, speed…)The level of requirement is always higher3 key words : Anticipate - Decide – Act as fast as possible...

INNOVATION IS A GROWING CHALLENGE

Product creationProduct creation

Product creation is not to be viewed in the narrow sense of Product creation is not to be viewed in the narrow sense of simply giving birth to a new product—but in a much broader simply giving birth to a new product—but in a much broader sense—product innovation, life cycle management. Product sense—product innovation, life cycle management. Product creation in this sense becomes a complete process by itselfcreation in this sense becomes a complete process by itself

•Finding out what customers might need / wantFinding out what customers might need / want•Generating ideas and technologies to meet Generating ideas and technologies to meet such needs and wantssuch needs and wants•Developing, realizing, and launching a productDeveloping, realizing, and launching a product•Providing supporting servicesProviding supporting services

Product creationProduct creation

Product /TechnologyStrategy

DevelopmentAnd

planning

Product /Project

management

Product support

Technology and resource development

Idea management

Inte

llige

nce

deve

lopm

ent

Barriers to product Barriers to product creation creation

1. Terrible inertia of status quo.—we’ve always done it this way. – rule of thumb –tried and tested kind of mind set. –change initiators are viewed with skepticism.

2. Organizational legacy.-functional specialization (pigeon hole)-sequential working (relay race)-too specialization can lead to unproductively-needless iterative loops-heavy handed hierarchy

Causes for success/ failureCauses for success/ failure

•Superficial market analysis 50%--(of which 60%due delay in distribution. And 40% due overestimation of market resources). •Production problems—38% (of which 50% delay from prototype to test market and 50% die difficulty in developing final product)•Insufficient financial resources—7%•Commercialization problems—5%

Failu

re f

acto

rs•Product fit with market needs—85%•Product fit with internal functional strengths—62%•Technological superiority of the product—52%•Top management support—45%•use of new product process—33%•Favorable competitive environment—31%•Structure of new product organization—15%

Succ

ess

cont

ribu

tors

The systems mind set as a possible The systems mind set as a possible solutionsolution

Aims at refocusing the organization on value creation.•Find out main things customers care about.

•Determine how well your company meets these customer expectations both despite and relative to competition

•Know about your competitor's plans to improve their product and services.

•Develop a strategy specific on customer satisfaction areas to catch up, to be on par, and to excel.

•Realign your internal processes, resources, and organizational characteristics to deliver to the customer what you have decided. Taking due care to ensure needs of the owners and the employees are directly addressed

•Systems thinking eliminate fragmented thinking.

Create a vision forCreate a vision forThe futureThe future

Assess the firm’s future

environment

Set strategic Directions

and priorities

Define the scope

of innovation

To seeding stage

Envisioning opportunities (fertilization)Envisioning opportunities (fertilization)

Creating a vision.Creating a vision.

Answering the following simple but essential questions can Answering the following simple but essential questions can help in creating a visionhelp in creating a vision

1.1. What do want to stand for as a corporation?What do want to stand for as a corporation?

2.2. What kind of products do we want to offer?What kind of products do we want to offer?

3.3. What kind of customers do we want to serve?What kind of customers do we want to serve?

4.4. What do we want our products to mean to our customers?What do we want our products to mean to our customers?

opportunistic

Customer segments

needsbenefitsfunction

sP.conept

Priority 2

Priority 1Priority 3

opportunistic

rejected

Uncharted (on hold)

Mapping priority innovation areasMapping priority innovation areas

oppo

rtun

itie

s

Market

Technologies

Competitors

Identifying opportunities Identifying opportunities

•Fast growing segments

•New trade/consumer groups

•New components,

• materials

•New processes,

•standards

• unmet needs

•New emerging needs

•Scope & focus

•Weaknesses / gaps

•Substitution products

•Emerging competitors

Generate ideas

Collect ideas

Screen ideas Enrich ideas Evaluateideas

Rank ideas

To incubation stage

From fertilization stage

seedingseeding

Incubation Incubation

Fund and programproject

Conduct exploratoryR&D projects

Conduct advancedMarketing projects

Start orientation phase

Evaluate and plan Product projects

Technical Feasibility From seeding stage

Concept refinement

If needed

Market validation

Product planning

Product development project

Product concept

Highest possible volumeLowest targetPrice/cost

Low product costHighest specsWithin the cost

Maximum customer value

Overturning traditional Price performance

relationship

Systematic questioning of cost assumptions

Shared hierarchy of attributes and

obsession with value

Understanding of price /volume relationship

Rethinking customer valueRethinking customer value